The Hindu Business Line : Forex reserves down $793 m

The exchange reserves declined for the first time in 17 weeks in the week ended May 19, mainly due to dollar weakness. The forex reserves were down by $793 million, to $162.962 billion against $163.755 billion in the earlier week.

In the earlier week, forex reserves had surged by over $1.3 billion.

As per the Reserve Bank of India figures, for the week under consideration, foreign currency assets fell by $787 million to touch $155.879 billion. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of currencies as euro, sterling and yen.

Dollar weakness

According to the chief of treasury at a private bank, this is mainly due to dollar weakness. "The dollar was down about 400 points against the euro last week," he said.

The FII outflows from the domestic equity market were around $858.2 million in the same period. The euro traded between $1.2835 and $1.2753 against the dollar in the week concerned. Gold was unchanged was $6.301 billion.

The reserve position in the IMF fell by $6 billion to touch $782 million.

This week the rupee declined towards the close of the week mirroring the domestic equity market. Dealers said it could touch levels of 46, after which there could be a turnaround.

"Consolidation levels for the rupee could be around 45.75 for some time, as there is not much follow through dollar demand and the stocks are doing well now," he said.